planned to reaffirm auto loan...having second thoughts...

[Rob517]

So I filed at the end of October and have my 341 this week. My plan was to keep my auto but now iim thinking I should have let it go to save more money each month. Only problem is I wouldn't have a vehicle. What are my options? Could I amend and give it up without much trouble? What about getting a new car? Would I be allowed to go get a new auto loan in the middle of my BK? I would obviously need my mom to either co-sign or get it in her name since I would never be approved. Would the trustee allow this seeing that I am doing it to save money? Just a thought, looking for your thoughts, experiences etc...

Oh and let me be clear...I would get a quality used vehicle, not a new auto by any means. I could lower my payment by a few hundred without a doubt. I'm upside down like crazy in my current auto.

[StartingOver08]

Excellent idea to get rid of a vehicle that is so upside down! Since you can save several hundred $$ per month getting another vehicle it is a wise decision IMO. You can change your Statement of Intentions to surrender. You have time to do this, as long as it is changed and filed by your attorney before your discharge.

You get much better financing on your vehicle if you are discharged then in the middle of a BK. So, you might just wait until a week or so prior to discharge before you change your Statement of Intentions. Call your lender after your discharge to make arrangements for pick up of the old vehicle. In my case I called to make arrangements and they sent someone within 5 days. Some lenders take longer.

[Stilltheone]

Take it from someone who has reaffirmed an auto and wished she hadn't...DON'T DO IT, especially if you're upside down in it.

When we signed our reaffirmation on our Escalade, we actually had equity. Then gas for $4/gallon hit and our value tanked. We are now so upside down in it, but can't get rid of it because of the negative equity and the reaffirmation agreement we signed. We're stuck with it until it's paid off in 3 years...UGH!

[Rob517]

Take it from someone who has reaffirmed an auto and wished she hadn't...DON'T DO IT, especially if you're upside down in it.

When we signed our reaffirmation on our Escalade, we actually had equity. Then gas for $4/gallon hit and our value tanked. We are now so upside down in it, but can't get rid of it because of the negative equity and the reaffirmation agreement we signed. We're stuck with it until it's paid off in 3 years...UGH!

Thanks for all of the info. I talked to my attorney and didn't think it would be an issue to let it go. He advised to just wait a bit after the 341 and the trustee shouldn't have a problem with it since I could show that I am making payments on another vehicle even if my mother puts it in her name. I am looking hard for something reliable and cheap.

My only worry is that the trustee says that since I'm giving up the car I have more disposable income and puts me in a ch. 13. My attorney said its unlikely to happen but it technically could. So I'm a bit nervous and still unsure.

Thank you both for the advice. 29 hours to my 341. I am looking forward to getting it over with.

[StartingOver08]

Good luck with your 341. It sounds like you will do fine.

[Rob517]

Well I have decided to surrender the vehicle and change my intentions of reaffirming the loan. I hope the Trustee doesn't look at it as more DMI and force me into a 13. I am going to wait until after discharge and get something good for going to work and back (44 miles each way.)

If I do get placed into a 13, would the Trustee allow me a certain amount to use toward a vehicle payment or is it "too bad, so sad you surrendered your vehicle and now ALL of that money you used for a payment is mine!!" I'm hoping he would allow me a reasonable deduction for a car payment and then take the rest since transportation is pretty much a necessity.

Anyone have experience with this happening?

[StartingOver08]

The Trustee does not look at your "new" income without the vehicle payment after your 341. Changing the Statement of Intentions to surrender is a paperwork issue and SOP - nothing to worry about and the wise thing to do.